Buying a property in Dubai: Reality check for Dubai real estate market

Reality check for Dubai real estate marketAshirwad Somani

Everyone is busy figuring it out, whether this is a breather, the start of a downward spiral, an offseason discount sale which you should not miss, or the start of moderate growth with no realistic gains which part of Dubai real estate had once been famous for.

Although every time, in every investment asset class, these turns and ''which way will it go'' moments keep coming, every time... what can be appears a very obvious one in hindsight. But being in the moment and realizing it is this moment of choosing which way you want to go is a thrill in itself.

If you choose to stay out of the market and wait, you could have lost a great bargain moment. If you went all in for every deal you get a hold of, you could be left with no cash to spare and unable to afford better deals coming your way after that. This is where strategies, instincts, experience and wisdom all come to play at once. Which brings me to my point of what I think will be this moment called when you get to look back at it:

''Silence before the storm,'' ''A minor seasonal event,'' ''The best lost opportunity to get deals,'' ''Sluggish before it drops dead'' or ''End-of-cycle symptoms.''

Again, taking advice from one of my clients who encouraged me to be very candid about my stand in taking the risk of being wrong, I have my own term for this kind of moment (a few months past and coming): ''Raid on the gamblers before the World Cup.''

If you look at the bubbles brought into the market as a result of speculation a few years back, and the force behind them, that is, the speculators, what we are witnessing right now is going to be a few months of penalties on those who did it, and we are looking to do it in a bigger way until, of course, the raid happens.

Speculators and speculation will suffer a setback with new and improved rules and regulations, and these will discourage them from excessive speculation for at least some time. This, in turn, will buy end-users the time to evaluate and find their home, which becomes a difficult task in a constantly moving market. The overall absorption of the market becomes better.

Being a real estate advisor, we are posed with the question of what you think of the market (future) five times in a day, and having a strong opinion is part of the job. People look up to you to advise them. It's only fair that you should have a better view and analysis of the market, and be able to give honest and candid advice.

One reason why I don't feel this is the ''end of a cycle event'' is simply because the speculative activity is not on a scale that a blow to it at this stage can send the market on a negative spiral.

For the overall longevity of the market, these breathers/corrections are like vaccinations. They make you feel sick for a few days but then you come out stronger and with a higher immunity. As I said earlier, I am excited and the reason for my excitement must be clear by now – that there could have been no better timing for some reality check in the Dubai real estate sector than this.

So is it, then, going to be in hindsight ''the best lost opportunity to get deals?''

Yes, it will be; however, there will be a sweeter spot in a few months (two to five months) to strike with your best-timed transactions. We don't have to always be perfect in timing (and it is virtually impossible to always be right), but we can try to be as close to the best deals as can be, and the best way to do it is to start looking now, but don't spend your hard-earned money so easily. Take your time and choose the right product, and not only the ones that seem to come at the best price.

Opportunity may knock on some doors ''twice,'' so keep your ears ready for the second knock. It will be loud enough, but of course, if you stay alert on hindsight.

Source: Ashirwad Somani, Special to Freehold

The writer is Managing Director, Candour Real Estate


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